Stem Cells Create a Therapeutic Niche


Stem cell therapy has gained increasing traction in various therapeutic areas, from cancer to diabetes to ocular regeneration.

Stem cell therapy has gained increasing traction in various therapeutic areas, from cancer to diabetes to ocular regeneration. Although the use of embryonic stem cells is controversial, remarkable research in the field of adult induced pluripotent stem cells (iPSCs) has highlighted the tremendous potential of this unique treatment in development and regeneration. Additionally, understanding how stem cells function would improve our insight into various diseases—to fathom “what went wrong.”

Globally, patients are actively being recruited to participate in clinical trials of these regenerative therapies. A biotechnology company, Advanced Cell Technology, is testing human embryonic stem cell (hESC)-derived retinal cells for two different eye diseases: Stargardt’s macular dystrophy,1 which is a form of juvenile macular degeneration, and age-related macular degeneration.2 These are primarily phase I and II safety and efficacy trials, and a preliminary report published in early 2012 did not observe any safety issues with the therapy.3 Hematopoietic stem cells (HSCs), isolated from the bone marrow or umbilical cord blood, have been widely used to treat blood cancers and other blood disorders for some time.

Osiris Therapeutics, based out of Columbia, Maryland, is currently conducting phase II trials using human mesenchymal stem cells (MSCs) to repair heart tissue following a heart attack, repair lung tissue in chronic obstructive pulmonary disease patients, and protect pancreatic beta cells in patients with newly diagnosed type 1 diabetes mellitus.4

While bone marrow transplants for numerous blood disorders, including cancer, have been covered by insurance policies for some time now, stem cell therapies are increasingly gaining attention with improved and less ethically challenging procedures being developed from adult stem cells.

The Basics

Stem cells, during early stages of development (in infants and children), have the unique potential to develop into any cell type, a property defined as pluripotency. Additionally, stem cells, even in adults, have “regenerative” potential, which helps them replenish damaged tissues and organs. These cells present distinct behavior depending on their site or location in the body, and they respond to specific environmental cues. For example, stem cells in the gut and HSCs regularly divide to repair and replenish worn-out tissues, while stem cells in organs like the pancreas or the heart divide only under specific conditions.5

Distinct from other cell types, stem cells have the ability to undergo cell division and replicate, even after dormancy. Additionally, following specific cues, they can be prompted to differentiate into tissue- or organ-specific cells with special functions.5 Although every human organ (except nerve cells) can undergo repair by stem cells, the process dwindles with age, or is quite inactive in some organs and tissues.6 Most of the current research, independent of the therapeutic area, is geared toward understanding the stimuli that activate/reactivate stem cells to allow for age- or disease-related tissue damage.

Types of Stem Cells

The human body is primarily the source of two types of stem cells: embryonic stem cells and adult or somatic stem cells. hESCs are derived from embryos that remain unused following in vitro fertilization, following the informed consent of the donor.5 These cells need specific signals to differentiate to the required cell type, but they run the risk of developing into a tumor if injected directly.7 Thus, in addition to the associated ethical issues, tumor formation and transplant rejection are some of the barriers faced with hESCs.8 The use of adult stem cells, such as HSCs, does not involve any ethical issues, and when obtained from the recipient, the cells are not susceptible to immune rejection. An adult stem cell—an undifferentiated cell that exists among differentiated cells in a tissue or organ—is capable of generating the cell types of the tissue in which it resides, and maybe unipotent or multipotent.

The field is burgeoning, and there is tremendous excitement among researchers to use adult stem cells in therapy. While HSCs have long been used in stem cell transplants, MSCs (non-HSCs) can generate cartilage, bone, and fat cells to form blood and fibrous connective tissue (Figure 1).5

Figure 1. The Tremendous Potential Offered by Stem Cell Research10


Exciting, albeit controversial, results of human cloning were recently published in the journal Cell Stem Cell following collaborative research conducted by scientists at the CHA Stem Cell Institute in Seoul, Korea, the Research Institute for Stem Cell Research (a part of the CHA Health Systems), and the company Advanced Cell Technology. The scientists “reprogrammed” an egg cell by removing its DNA and replacing it with nuclei from two adult donors aged 35 years and 75 years. The experimental procedures could successfully generate two karyotypically normal diploid ESC lines. This technique had previously been developed, but with infant/fetal donor cells, which, unlike adult cells, are not associated with agerelated changes such as shortened telomerases and oxidative DNA damage.9Extracting and then maintaining adult stem cells in the laboratory is extremely difficult, as they have a limited capacity to divide in culture.5 The discovery of the “transdifferentiation” process of adult stem cells, wherein adult stem cells are subjected to certain differentiation techniques to generate cell types different from the predicted types, was therefore very exciting.8

Taking the process a step further, researchers in Japan developed a technique to reprogram normal adult cells into stem cells, the iPSCs, by the forced introduction of a set of transcription factors into the cells.10 These transcription factors (different combinations of Oct4, Sox2, Klf4, c-Myc, Nanog, Lin28) regulate important steps in early embryonic development and force the adult somatic cells into an embryonic stem cell—like state. This technique has essentially revolutionized the field of regenerative medicine; the patient himself could now be an unlimited source of immune-matched pluripotent cells.11

Applications of iPSCs

As promising as the therapy sounds, it is riddled with its own problems. It has always been known that the genes that regulate developmental pathways also regulate cancer, and are especially potent when expressed in combination. Therefore, researchers have trimmed the initial group of four transcription factors down to two, with the aim of simultaneously treating the cells with various chemicals to boost reprogramming efficiency. Additionally, the use of either lentiviruses or retroviruses (Figure 2) to introduce the genes into the host cell can result in uncontrolled effects of viral integration. Current efforts are directed toward reprograming cells without viruses or using more efficient integration techniques.11iPSCs offer tremendous potential in understanding disease, developing drug candidates, and regenerative medicine. Disease-specific iPSCs are being developed to treat Alzheimer disease, Parkinson disease, cardiovascular disease, diabetes, and ALS/Lou Gehrig disease.11 Researchers at the RIKEN Center for Developmental Biology in Japan have piloted the first set of studies to evaluate iPSCs in humans. In August 2013, patient recruitment was initiated to evaluate the safety and efficacy of iPSC-derived retinal pigment epithelium (RPE) cells in patients with age-related macular degeneration.12 The premise for using iPSCs is the fact that the current remedies for the disease prevent further damage without promoting any repair.

Figure 2. Generation of iPSCs From Adult Somatic Cells

iPSCs indicates induced pluripotent stem cells.

Adapted from: Regenerative Medicine. Department of Health and Human Services. Pages/2006report.aspx. Published August 2006. Accessed April 4 2014.

A new iPSC transplantation therapy will also be evaluated for safety in patients with Parkinson disease. Jun Takahashi, MD, PhD, and his colleagues at the Kyoto University’s Center for iPS Cell Research and Application have successfully developed a technique to generate dopamine-producing nerve cells from patient-derived iPSCs for transplantation into the patient’s brain, an attempt at regenerating the damaged dopaminergic neurons.13 When contacted by e-mail, Takahashi responded that they are currently conducting preclinical studies, the results from which will be submitted for approval prior to initiating clinical trials.

In a novel approach, researchers at the RIKEN Research Center for Allergy and Immunology reported the generation of cancer-specific killer T cells from iPSCs. The human body has a natural ability to produce tumor-specific cytotoxic T lymphocytes, which when activated are effective but not sufficient to cure the patient, due to their short life span. To tackle this problem, the scientists reprogrammed T cells into iPSCs, which were further manipulated to differentiate into mature T cells. Although the tools are ready, they have not yet been tested in vitro or in vivo for their cancer cell—killing potential.14

Targeting Cancer Stem Cells

The concept of a cancer stem cell (CSC) has been around for quite some time; scientists found it easier to explain the problems of resistance, recurrence, and minimal residual disease in cancer by acknowledging that these types of cells do exist.

A CSC is defined by its ability to regenerate an entire tumor and is explained by either a stochastic model (every cancer cell can become a CSC) or the hierarchical model (which identifies CSCs as an independent entity within a tumor).15 Recently, the dynamic CSC model has been gaining hold, which proposes that the differentiated cancer cells can reacquire CSC features following environmental cues (Figure 3).16

Either way, the persistent problem faced in cancer treatment is the elimination of these cells. The cells that survive gather mutations as they evolve, especially after exposure to drugs, and develop increasing resistance. Additionally, the entire region becomes more fluid—creating a stem cell “niche”—due to crosstalk with the tumor microenvironment that further promotes tumor maintenance.15

Figure 3. The CSC Resistance Model15

A. Cancer stem cells (CSCs, red) are more resistant to conventional therapies than differentiated cells (blue). The surviving CSCs following treatment repopulate the tumor with their clones, resulting in relapse.

B. CSC ablation should result in reduced proliferation and malignancy.

C. Differentiated cells can rebound and acquire CSC features following environmental cues and signaling by stromal cells (green), resulting in relapse when treatment is halted.

When asked to comment on the importance of CSCs in malignancy and resistance, Robert Weinberg, PhD, the Daniel K. Ludwig Professor for Cancer Research in the Department of Biology at the Massachusetts Institute of Technology and a founding member of the Whitehead Institute for Biomedical Research, said in an e-mail, “There is increasing evidence that carcinoma cells that have undergone an epithelial-mesenchymal transition (EMT) are more aggressive clinically, sources of metastasis, and poised to enter into the CSC state, which by definition confers on them tumor-initiating powers. Presumably such powers are critical for disseminated cancer cells to serve as the founders of new metastatic colonies. Moreover, CSCs appear to be generally more resistant to a variety of currently employed chemotherapeutics, making them sources of residual disease following initial treatment in the oncology clinic and thus sources of clinical relapse.”

In response to whether he thought that the stromal cells that constitute the tumor milieu might be differentiated CSCs that feed back and promote the aggressiveness of the disease, Weinberg, who also chairs the scientific advisory board of the biopharmaceutical company Verastem, said, “Since carcinoma cells that have undergone EMT take on many of the attributes of the mesenchymal cells in the adjacent recruited host stroma, they may take on many of the attributes of naturally arising stromal cells; however, it remains unclear whether these mesenchymally converted carcinoma cells contribute significantly to the overall cellularity of the stroma.”

Interfering with the innate survival signals in CSCs, as well as the survival signals that are transmitted to CSCs from the tumor environment, seems the most likely path to follow to eliminate these culprits. This approach has proved to work in preclinical animal models and is being applied to humans as well.

Companies such as Verastem, Stemline, and OncoMed are developing drugs that would specifically target the CSC population in various tumors (Table).

Healthcare Coverage

Is regenerative medicine covered? Payers such as Humana, Blue Cross and Blue Shield, Aetna, and UnitedHealth definitely have policies in place for HSC and bone marrow transplants, a procedure that has been in use for a long time now for patients with blood disorders. However, companies that have developed, or are in the process of developing, regenerative therapies, face hurdles with not just the FDA, but also with reimbursement.

Table. CSC-Targeting Drugs Under Development


Tumor Type



VS-6063 (FAK inhibitor)

KRAS mutant


Ovarian cancer

Phase II

Phase II

Phase I/IB


VS-4718 (FAK inhibitor)

Metastatic nonhematological malignancies

Phase I/IB

VS-5584 (PI3K and mTOR1/2 inhibitor)

Solid tumors and lymphomas

Phase I/IB


SL-401 (recombinant human IL-3)



Phase I/II

Phase I/II


SL-701 (vaccine)

Recurrent glioblastoma multiforme

Phase I/II


Demcizumab (anti—DLL-4 antibody) (+ pemetrexed +/- carboplatin)


Phase I


Demcizumab (+ gemcitabine +/- nab-paclitaxel)

Pancreatic cancer

Phase I


Demcizumab (+ paclitaxel)

Ovarian, primary peritoneal, fallopian tube

Phase I


Tarextumab (OMP-59R5) (anti-Notch 2/3) (+/- gemcitabine + nab-paclitaxel)

Pancreatic cancer

Phase I/II


Tarextumab (+/- etoposide + cisplatin)


Phase I/II


AML indicates acute myeloid leukemia; BPDCN, blastic plasmacytoid dendritic cell neoplasm; CSCs, cancer stem cells; DLL-4, delta-like ligand 4; FAK, focal adhesion kinase; IL-3, interleukin-3; mTOR, mammalian target of rapamycin; NSCLC, non—small cell lung cancer; PI3K, phosphatidylinositol-3 kinase; SCLC, small cell lung cancer.

Sources:; Verastem website.;

Stemline website. http://www.; OncoMed website. Accessed October 7, 2014.

The company Advanced BioHealing developed Dermagraft, a product that consists of allogenic human fibroblasts, to aid with wound closures in diabetic foot ulcers. In 2011, the company was acquired by Shire Pharmaceuticals, which immediately initiated the task of improving the reimbursement profile for Dermagraft and put 2 new procedure codes in place for the product.17

Sipuleucel-T (Provenge), an autologous dendritic cell therapy manufactured by Dendreon for the treatment of advanced prostate cancer, also faced stumbling blocks, initially for FDA approval. Subsequently, the Centers for Medicare & Medicaid Services (CMS) did not provide an automatic coverage for this expensive treatment ($93,000 for 3 doses) following the approval, but rather reviewed the payment process first before approving it after a year.

Medicare coverage was absolutely essential for this drug, since 75% of the target population was Medicare eligible (65 years or older). Thus the combination of the price and the large number of patients who would be eligible for this treatment was the premise for Medicare’s extended review.18,19 CMS eventually approved coverage in June 2011.18

According to a brief released by the Alliance for Regenerative Medicine, an advocacy organization that creates a common platform for commercial, academic, and not-for-profit institutions, Medicare requires that the regenerative therapy should fall within a defined Medicare benefit and the parameters of one of these segments to qualify for payment.

Medicaid relies more on managed care and strict formularies, while private health plans may primarily be concerned with whether the therapy falls under the medical benefit or prescription drug benefit. FDA approval is necessary but no longer sufficient for reimbursement.20

Defining the bottom line for the high-cost coverage of regenerative medicine requires answering the same question that must be asked in considering expensive treatments such as Sovaldi and Olysio (hepatitis C). Although the up-front cost of treatment is very high, if the therapy proves to have breakthrough effects, it could help avoid long-term treatment costs, especially for chronic conditions. In order for insurance companies to cover these therapies, stem cell therapy would need to prove a substantial advantage over preexisting and relatively inexpensive treatment options.


  1. NIH Clinical Trials Registry. website. Identifier: NCT01345006.
  2. NIH Clinical Trials Registry. website. Identifier: NCT01344993.
  3. Schwartz SD, Hubschman JP, Heilwell G, et al. Embryonic stem cell trials for macular degeneration: a preliminary report. Lancet. 2012;379(9817):713-720.
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  6. Stem cells and cancer. Ludwig Center for Cancer Stem Cell Research and Medicine website. http://ludwigcenter. Accessed April 14, 2014.
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  10. Okita K, Ichisaka T, Yamanaka S. Generation of germline- competent induced pluripotent stem cells. Nature. 2007;448(7151):313-317.
  11. Regenerative medicine. Department of Health and Human Services. Pages/2006report.aspx. Published August 2006. Accessed April 4 2014.
  12. Pilot clinical study into iPS cell therapy for eye disease starts in Japan [press release]. RIKEN; July 30, 2013. Accessed April 4, 2013.
  13. Geji K. Scientists to test iPS cells for Parkinson’s disease therapy. The Asahi Shimbun. article/behind_news/social_affairs/AJ201306070062. Published June 7, 2013. Accessed April 15, 2013.
  14. Vizcardo R, Masuda K, Yamada D, et al. Regeneration of human tumor antigen-specific T cells from iPSCs derived from mature CD8+ T cells. Cell Stem Cell. 2013;12(1):31-36.
  15. Filipovic A, Stebbing J, Giamas G. Cancer stem cells— therapeutic targeting or therapy? Lancet Oncol. 2013;14(7): 579-580.
  16. Vermeulen L, de Sousa e Melo F, Richel DJ, Medema JP. The developing cancer stem-cell model: clinical challenges and opportunities. Lancet Oncol. 2012;13(2):e83-e89.
  17. Schaffer C, Littman N. Why planning your payment strategy is critical in early product development. California Institute for Regenerative Medicine website. http:// planning-your-payment.html. Published June 17, 2013. Accessed April 17, 2014.
  18. Larkin C. Dendreon wins final Medicare coverage decision on prostate cancer drug. Bloomberg website. http://www. medicare-coverage-decision-on-prostate-cancer-drug. html. Published June 30, 2011. Accessed April 17, 2014.
  19. Maziarz R, Driscoll D. Hematopoietic stem cell transplantation and implications for cell therapy reimbursement. Cell Stem Cell. 2011;8:609-612.
  20. Alliance for Regenerative Medicine. Alliance for Regenerative Medicine reimbursement portfolio. http:// ARM_Reimbursement_Portfolio_Oct_2013_0.pdf. Accessed April 17, 2014.

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